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Fighting Flares in Eastern Ukraine's Donbas Region; VP Harris Travels to Munich; Olympic Figure Skating Final; Forced Labor Allegations; Increased Shelling Rattling Of Eastern Ukraine; Russian Foreign Minister: Escalation Is In Hysterics; Lviv Becomes A Refuge For Ukrainians Feeling Their Homes. Aired 2-3a ET
Aired February 18, 2022 - 02:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[02:00:00]
(COMMERCIAL BREAK)
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: Hello, everyone. I'm Michael Holmes, coming to you live from Ukraine. There has been renewed shelling in the Donbas region to the east.
Now, with tensions high between Kyiv and Moscow, we are going to have a look at fears that clashes with Ukrainian separatists could spiral out of control.
LYNDA KINKADE, CNN CORRESPONDENT (on camera): Hello, I'm Lynda Kinkade, live at CNN's world headquarters here in Atlanta. Women take to the ice for figure skating at the winter Olympics as the sport confronts a doping scandal. We will go live to Beijing for the latest.
HOLMES: Welcome, everyone. We begin with a renewed fighting between Ukrainian forces and pro-Russian separatists in Eastern Ukraine that is fueling fears of an all-out war in the region.
Ukraine says rebel shells hit the school in Luhansk, wounding three people. Fortunately, no kids. Now, the two sides have been fighting in that area for the last eight years, and western officials are warning Russia could use a scenario, just like this, to justify an invasion.
U.S. President Joe Biden says all indications are that an attack from Russia could come in the next several days. A source says he will hold a call with a number of world leaders in the coming hours, including NATO's secretary general.
(BEGIN VIDEO CLIP)
JENS STOLTENBERG, NATO SECRETARY GENERAL: So, we are concerned that Russia is trying to stage a pretext for an armed attack against Ukraine. It is still no clarity, no certainty about the Russian tensions. We don't know what will happen. But what we do know is that Russia has amassed the biggest force we have seen in Europe for decades in and around Ukraine.
(END VIDEO CLIP) HOLMES (on camera): Meanwhile, Russia releasing more videos, claiming to show troops finishing up their military drills and returning to their home bases. The U.S. and British defense secretaries say Russians' presence around Ukraine is actually growing, not diminishing.
The U.S. vice president, Kamala Harris, leading the American delegation to the Munich Security Conference in the day ahead, where the Russia- Ukraine crisis will, of course, dominate the agenda.
The president of Belarus, meanwhile, Alexander Lukashenko, he will visit the Russian president, Vladimir Putin, in Moscow in a few hours. Those two countries staging joint military drills just a few kilometers from Ukraine's northern border.
And the U.S. secretary of state, Antony Blinken says he will meet with Russian Foreign Minister Sergey Lavrov next week in Europe as long as Russia, of course, hasn't invaded Ukraine by then. And at the U.N. on Thursday, Lavrov's deputy called western predictions of an invasion, hysteria.
(BEGIN VIDEO CLIP)
SERGEI VERSHININ, RUSSIAN DEPUTY FOREIGN MINISTER (through translator): I would like to finally say that you will be able to resist the temptation to play to the cameras and will not make this meeting of ours into a circus. We will not present baseless accusations, saying that Russia allegedly was going to attack Ukraine. I think we have had enough speculation on that.
(END VIDEO CLIP)
HOLMES (on camera): The vice president, Kamala Harris, as we said, is leading the U.S. delegation to the Munich Security Conference. That gets underway in the hours ahead.
CNN's Scott McLean, live this hour in London, with a preview. Scott, what are the expectations for the vice president in Munich?
SCOTT MCLEAN, CNN CORRESPONDENT: Hey, good morning, Michael. Look, the president, Joe Biden, has given his deputy, Vice President Kamala Harris, a lot of pretty tough assignments as of late. Her main one has been to solve the crisis on the U.S. border, the migrant crisis. Now, she is taxed with leading this U.S. delegation to try to solve the crisis on the Ukrainian border.
But I don't think that anyone is expecting for Kamala Harris to show up in Germany having all of the answers or being able to solve this crisis on her own.
As you mentioned, she did arrive late in Munich last day, and she has a pretty jam-packed schedule ahead of her. She's going to be meeting with the NATO secretary general, Jens Stoltenberg, as well as the leaders of Latvia, Lithuania, and Estonia, on top of the meeting with the Ukrainian president, Volodymyr Zelensky as well. And then tomorrow, she will give a moderated talk at the Munich Security Conference.
Her team says that her priorities are to focus on what is happening on the ground, to make sure that all of the allied countries are on the same page in terms of their response, and to send the message that, of course, the U.S. prefers diplomacy, but that it is ready to respond in the event of Russian aggression.
[02:05:07]
MCLEAN: This is the message that we have heard at (INAUDIBLE) for weeks right now. The problem with that last point is that Russia won't actually be at the security conference to hear it for themselves. Last week, they announced that they will be skipping this year's event because as they see it, this has become a purely transatlantic forum and lost its inclusivity and objectivity.
It doesn't seem like the west is really that anxious, either, Michael, to dispel that notion. Germany says that it is going to be hosting a G7 foreign ministers meeting on the sidelines of the conference and, at the moment, Russia, of course, is not a member of the G7. All the G7 nations are allied, western, democracies right now.
It doesn't seem like, maybe, it would make that big difference if Russia was there anyways because lately, the parties have been talking past each other. For instance, the U.K., they have been in lockstep with the United States.
Last week, the Russian foreign minister, Sergey Lavrov, described his meeting with the British foreign secretary, Liz Truss, as like talking to a deaf person because she was so rigidly sticking to her talking points. And surely, the feeling, the way that Lavrov described it, is very likely mutual.
Munich may well be a chance for all of the western countries to get on the same page. For instance, Truss sort of had a veiled message for Germany, maybe not so veiled message, that they would need to be willing to accept short term pain for long term gain. In other words, being willing to give up on the Nord Stream 2 pipeline from Russia to Germany.
Of course, that's easy for Britain to say. They don't have nearly the reliance on Russian gas that mainland Europe does. It is unlikely, though, Michael, that we're expecting any sort of big breakthrough in terms of diplomacy with Russia, a country that isn't actually going to be there this weekend.
HOLMES: All right, a great preview there. Scott McLean in London, appreciate it. Thanks so much.
All right, let's take a closer look now at the kindergarten hit by artillery fire in Eastern Ukraine. Now, it is unclear who fired first, but Ukraine's president is calling the shelling a big provocation.
CNN's Clarissa Ward visited the damaged school and explains why it was such a close call.
(BEGIN VIDEOTAPE)
CLARISSA WARD, CNN CHIEF INTERNATIONAL CORRESPONDENT: This kindergarten is less than three miles from the so-called line of contact, the frontline. And witnesses in this area said that around 8:00 or 9:00 o'clock this morning, they started to hear shelling. It was loud enough that they could hear the whistle of the shells going by. And two of them landed here at this kindergarten. Let's take a look.
So, she is saying that the children, fortunately, were over there having their breakfast and playing. If they have been in that room there, this could be a very different story.
So, this is where the Ukrainian military says that one of those artillery shells hit. And you can see, this is a room where children would be playing every day. It happened that this morning, there were no kids in this room at the time of impact, but three people who work in the school in that kindergarten, I should say, are now being treated, according to local authorities, for concussions.
(END VIDEOTAPE)
HOLMES: All right, Clarissa Ward there.
Joining me now from Moscow, Alexander Baunov, a senior fellow and editor-in-chief at Carnegie.ru. Great to have your voice on this. I'm curious. When you take a broad view of what is going on, can you see a scenario where Putin does not invade but just basically keeps, I don't know, a semi-permanent presence on the border, as Belarus, and just hurt Ukraine economically, keeping the pressure on?
ALEXANDER BAUNOV, SENIOR FELLOW AND EDITOR-IN-CHIEF, CARNEGIE.RU: Hi to everybody. It is one of the possible scenarios. Basically, what happened in the beginning of this week, we have seen a sort of de- escalation inside the escalation. Putin met Lavarov for commerce and both decided to give a chance to diplomacy, and then declare the pullback of some troops from Ukrainian border.
But, then, we have this disappointment, negative reaction of the Kremlin to the western response to the document, with Russian concerns on demands, most were handed over to the west several weeks or months ago. That is basically equal to the statement that diplomacy has failed.
And now, after such an extraordinary escalation, you have to show extraordinary results, impressive results. The kremlin did not get this impressive result. He has to show force, he has to react invincibly. And there are several possibilities of them.
[02:09:51]
BAUNOV: They are talking about some military, technical response, which we don't know what exactly do they mean, but one, I think, is exactly as you mentioned, turning this escalation, the escalation cycle around Ukraine in a permanent threat just to punish Ukraine for its pro-western choice and hindering its development. HOLMES: You study Putin literally. You study him. How do you think he views himself in terms of his role in the post-Soviet Russia? Does he want a do-over for agreements made back in the 1990s? Does he see those things as mistakes that he needs to correct?
BAUNOV: His role changed over this long period of time. He started as somebody who, first, has been tasked to save the newborn Russian market economy, newborn Russian capitalist from the red (INAUDIBLE) communist party, one of the strongest parties in opposition. He was supported by the Russian -- again, newborn business community by oligarchs, by President Yeltsin and family. He was thinking he could bring Russia closer to the west on the condition of (INAUDIBLE).
At the same time, he could get disappointed with this idea of bringing Russia closer to the west. He has started this gradual confrontation, you remember (INAUDIBLE) of 2007, it was a milestone, the Georgian war of 2008, and so on and so on.
We are now in a completely different situation with in a completely different Putin, if we compare him with the beginning of his presidential career in 1999 or 2000.
HOLMES: Yeah.
BAUNOV: How he seems to rule now, it's so different.
HOLMES: A great point. I mean, it is a different Putin. He does feel like he would like to change some things. Before -- we are almost out of time. I want to ask you this. How concerned are you about the Donbas, that things will go out of control there between the separatists and the Ukrainian army?
BAUNOV: It's a big danger because huge number of troops have been amassed from Russian side. The Ukrainian troops are mostly there on the western side of Donbas separation line. We see in the recent days and hours the intensification of shelling and smaller fighting.
I remember very well in 2008, exactly the same sort of intensification of smaller fighting and shelling preceded the Georgian war and the Russian invasion into Georgia. (INAUDIBLE) is a very important link in the chain, a pretext, a clear pretext to invade.
In 2008, it was a shelling from the Georgian side, testified later by international commission. Then, in 2014, we had a major crisis inside of Ukraine itself. The major shooting in Kyiv, things like that. Now, we don't have such a clear pretext to invade.
And for Russian public opinion, it is not clear to sell the full-scale invasion into a neighboring country with thousands of family ties between the citizens just out of the blue without having anything clear. Now, the danger is this sort of pretext can be created intentionally or can appear in this atmosphere of tension and minor fights and shelling.
HOLMES: Understood. Great to have your analysis on this. Alexander Baunov in Moscow, got to leave it there. Thank you so much.
BAUNOV: Thank you.
HOLMES: All right. I am Michael Holmes in Lviv, Ukraine. I'll be back with more in about 15 minutes. For now, let's head back to Atlanta where Lynda Kinkade has the latest on the Olympics and the day's other stories. Lynda?
KINKADE: Thanks so much, Michael. Well, we do want to update you on the story out of Greece right now. Passengers have been evacuated from a cruise ship after a fire broke out on board. The Euroferry Olympia was carrying 237 passengers and 51 crew members and heading to Italy from a port in Western Greece. The coastguard said it was notified about the fire about 4:30 in the morning and mobilized teams to head to the ship as it burns north of Corfu.
[02:14:58]
KINKADE: Once again, a fire on a cruise ship off the coast of Greece. The passengers have been evacuated, and they are safe.
Still to come, a shocking finale at the Beijing Olympics. The Russian skater at the center of a doping scandal stumbles on the ice. What a disappointing performance means for her fellow competitors, next.
Plus, more controversy at the Winter Games as China denies accusations that its Olympic apparel has ties to forced labor and prison camps. Those stories when we return.
(COMMERCIAL BREAK)
KINKADE: Welcome back. The Olympic medal ceremony for the women's figure skating competition in Beijing will go on as planned in the coming hours. It was up in the air for days, depending on whether or not the Russian skater at the center of a doping scandal ended up on the podium. Fifteen-year-old Kamila Valieva fell multiple times during her performance on Thursday and finished fourth.
Meanwhile, Eileen Gu has become the first freestyle skier to win three medals in a single Olympic Games.
We have the competitions and the controversies covered for you. World Sport's Patrick Snell joins me here in Atlanta. First, I want to go to CNN's Steven Jiang for us in Beijing for the disappointing performance of 15-year-old Russian skater Kamila Valieva.
STEVEN JIANG, CNN BEIJING BUREAU CHIEF (on camera): Lynda, it was just so painful and heartbreaking to see Valieva compete on Thursday night. It was just such a stark contrast to the near perfection she displayed just a little over a week ago at the team event.
Now, this dark cloud of doping allegations seemed to be hanging over not just her but her teammates as well, even though two of them did win medals. They had so much tension and drama, a lot of tears, not necessarily tears of joy from these young athletes. Thomas Bach, the IOC president, held a press conference just a little while ago. He said how disturbed he felt watching Valieva compete. He could clearly see how much mental distress she was under. But he said he was even more upset by the treatment Valieva received from the adults, from the Russian team after she competed. Here is what he said.
(BEGIN VIDEO CLIP)
THOMAS BACH, PRESIDENT, IOC: When I afterwards saw how she was received by her closest entourage, with such a -- what appeared to be a tremendous coldness, you -- it was chilling to see this, rather than giving her comfort, rather than to try to help her. You could feel this chilling atmosphere.
(END VIDEO CLIP)
[02:19:57]
JIANG (on camera): So, like many others, Thomas Bach is now treating his fire (ph) on the adults surrounding Valieva, who are indeed under investigation for their role in the doping allegations.
Bach has also pointed out, doping rarely happens by athletes alone. It usually almost always involves their entourage. He also said he had heard so many lies and excuses about doping over the years from those adults.
Incidentally, the Court of Arbitration for Sport just released a summary of their hearing on this case. And in the summary, they said the adults, who claimed all of this was a result of contamination, did not prove, did not present any concrete proof. So, all of this is really showing the saga is far from over. Even the IOC itself, Lynda, is now under growing scrutiny as some critics say it has been giving the Russians a pass for too long. Lynda?
KINKADE: Yeah. All right, Steven Jiang for us in Beijing, thanks to you. I want to go to Patrick now on a brighter note because this really was a day that changed Eileen Gu's life forever in what an incredible performance.
PATRICK SNELL, CNN SPORT ANCHOR AND CORRESPONDENT: Yeah, absolutely. Those were her words earlier this Friday, it's changed my life forever! And it really has. You would imagine, the U.S.-born freestyle skier who represents China, that's what she is saying today.
Look at the history she has made, Lynda, at this Winter Games in China. What a story Gu has proved to be right throughout these games. She is now the first freestyle skier to win three medals in a single Olympics earlier on this day, showing all of her class, her dominance, her natural born flare to earn gold in the women's halfpipe event.
Adding to that, really, adding to that gold, she got in the big hair earlier in the Olympics, silver in the slope style as well. Her second run today, seeing her soar to new heights quite literally as she scored 95.25, the teen dropping to her knees in celebration before her third and final run, which was actually pretty much a victory lap down the pipe.
An extraordinary achievement. She has been the talk of these games on so many levels. Canada's Cassie Sharpe and Rachael Karker, second and third, respectively. But Eileen Gu making headlines everywhere she goes.
I do want to get on to America's superstar skier in the meantime, Mikaela Shiffrin. She has been having -- this is really disappointing -- the fact that she has had to hit back on her social media at her critics this Friday after what was another challenging day for her on the slopes yesterday.
The 26-year-old from Colorado, failing to finish for the third time at these Beijing Games. Afterwards, she was saying she felt like a joke.
Shiffrin, a two-time Olympic gold medalist, just to remind our viewers, crashing out of the Alpine combined event. Now, it means incredibly she -- she told reporters this afterwards -- she's now suffered 60 percent of her career, did not finish at these games. Extraordinary statistic. She had already failed to finish in her favorite disciplines, namely the slalom and the giant slalom. A huge disappointment for Mikaela Shiffrin. There is no question about that.
What is really, really disappointing to see, though, is that Shiffrin has had to endure a torrent of -- let's be honest -- just toxic abuse via social media across the last few days. On her Instagram, though, Shiffrin hitting back and sharing some of the phrases in the meantime that have sent her way, words like choker, arrogant, disgrace.
But, boy, did she hit back powerfully. Take a listen to this. She put this on her own social media. Well kids, feed then what you want to feed them. Self-pity, sadness. Let the turkeys get you down. There will always be turkeys. Or get up, again, again, again. Get up because you can, because you like what you do when it's not infested with the people who have so much apparent hate for you. Just get up.
Mikaela Shiffrin now, Lynda, speaking out and doing it very emphatically indeed, but such a shame she has such to do it in the first place, right?
KINKADE: Yeah, exactly. A wonderful response from her. Really is, as you say, a shame that she has to deal with that online hate. Patrick Snell, thank you so much.
Behind the fanfare and the glamour of the Olympic Games, the Chinese government is hoping to distract the world from its crackdown on freedoms, crimes against humanity, and its genocide, which it denies.
Part of its alleged oppression against the Uyghur Muslims and other minorities, the U.S. government says the Chinese's program is a forced labor. Hundreds of thousands of people in Xinjiang forced to work into cotton production and other industries. The product of that labor has been found in supply chains across the world, and possibly at the Olympic Games.
CNN's David Culver reports. (BEGIN VIDEOTAPE)
DAVID CULVER, CNN INTERNATIONAL CORRESPONDENT (voice-over): China's Olympic hero, Eileen Gu, appearing in a TV commercial set in Xinjiang for Anta, the country's biggest sportswear company and the maker of China's Olympic uniforms.
As Gu and her teammates wear their national Olympic gear with pride, Anta appears proud to use cotton from Xinjiang, where China is accused of forcing hundreds of thousands of Uyghur Muslims to work in cotton production and other industries, what the United States alleges as part of a much bigger state crime.
[02:25:06]
UNKNOWN: Genocide has taken place in Xinjiang.
CULVER (voice-over): Beijing has repeatedly denied the accusation, while the U.S. has effectively banned all imports from Xinjiang, trying to keep forced labor products out of American stores.
JEN PSAKI, WHITE HOUSE PRESS SECRETARY: Companies that fail to address forced labor and other human rights abuses in their supply chains face serious legal risks.
CULVER (voice-over): Anta has said it does not allow for forced labor, but its pledge to source from Xinjiang, puts the company in opposition to western competitors like Nike and Adidas, which say they do not want to do business there. Foreign auditors were also forced to leave China, making it harder to get independent verification.
BENNETT FREEMAN, COALITION TO END FORCED LABOR IN UYGHUR REGION: It's hard to imagine that substantial portions of the cotton is not tainted with Uyghur forced labor.
CULVER (voice-over): Anta has not responded to CNN's request for comment.
(On camera): You cannot miss Anta branded clothing at this Beijing Games, worn not only by team China and President Xi Jinping, but also by International Olympic Committee officials.
(Voice-over): Right groups and U.S. lawmakers have questioned whether the IOC could be complicit in forced labor through its partnership with Anta and another Chinese brand, HYX Group. CNN has reached out to HYX Group as well. No response.
Last month, the IOC announced the result of an independent due diligence study stating -- quote -- "We did not find any extreme violations against our IOC supplier code, including no forced, bonded, indentured, or child labor.
However, the Coalition to End Forced Labor in Uyghur Region says the IOC has not provided enough detail of the audit.
FREEMAN: The world needs to know the facts. We did not get them from the IOC. And for that reason, there will be lingering, disturbing questions as to whether Beijing '22 Winter Olympics were in fact complicit in Uyghur forced labor.
CULVER (voice-over): The IOC standing by its due diligence study, when asked by CNN Thursday.
UNKNOWN: None of our products, none of the production took place in Xinjiang, nor any of the input or raw materials come from that region.
CULVER (voice-over): Despite the IOC's very public reassurance, so murky are Xinjiang supply chains that companies from China and elsewhere and customers like the IOC could be relying on Uyghur forced labor whether they know it or not.
David Culver, CNN, Beijing.
(END VIDEOTAPE)
KINKADE (on camera): The U.S. warns that Russia is on the verge of attacking Ukraine, but Moscow calls the accusations baseless. We are tracking all the diplomatic and military maneuvers live from Ukraine.
(COMMERCIAL BREAK)
[02:30:07]
HOLMES: Hello, everyone. I'm Michael Holmes coming to you live from Lviv in Ukraine. And the U.S. making a case against Russia warning an attack on Ukraine could still come within days. The U.S. Secretary of State telling the U.N. Security Council on Thursday that Russia is manufacturing the groundwork to justify starting a war, possibly with a so-called false flag operation that fakes an attack in order to give Russia a reason to roll its tanks into Ukraine.
Antony Blinken says the U.S. hopes that by sharing what it knows with the world, Russia can be convinced to abandon the path of war. He also addressed concerns about the reliability of U.S. intelligence.
(BEGIN VIDEO CLIP)
ANTONY BLINKEN, UNITED STATES SECRETARY OF STATE: I'm mindful that some have called into question our information, recalling previous instances where intelligence ultimately did not bear out. But let me be clear. I am here today not to start a war but to prevent one.
(END VIDEO CLIP)
HOLMES: Now the U.S. President is expected to convene a call with key allies in the coming day to discuss the ongoing crisis. Meanwhile, there has been a big uptick in fighting between Russian-backed separatists and Ukrainian forces in contested areas of Eastern Ukraine. The increased shelling keeping all sides on edge. And yet Russia insists that's moving some forces away from Ukraine's borders.
(BEGIN VIDEO CLIP) SERGEY LAVROV, RUSSIAN FOREIGN MINISTER (through translator): Our military have orderly camped on their own territory, held drills, took down their tents, ordered the trains, loaded their hardware and started leaving. But the starks are still going on. This is where the escalation is in those particular action views.
(END VIDEO CLIP)
HOLMES: Now the U.S. State Department says Sergey Lavrov there and Blinken are planning to meet in Europe next week provided there is no invasion of Ukraine before that, of course. Now many people meanwhile are choosing to leave Ukraine's capital fearing for their safety. I spoke to one family in Lviv in the west of the country. So worried about their kids' safety, they chose to leave their home behind.
(BEGIN VIDEOTAPE)
HOLMES (voice over): In an apartment in Lviv in Western Ukraine, Natalia and Dmytro Kolesnyk play with their three young children. This is where they live but it's not their home. That's because until just a few days ago home was the capital Kiev, 600 kilometers to the east. Now a potential Russian target.
DMYTRO KOLESNYK, FATHER: Kiev is also could be attacked by a missile or maybe some Kiev factory or Kiev energy base.
HOLMES: According to American intelligence, Kiev would be a primary target if Russia invades and that's why the Kolesnyk family decided they couldn't risk stain.
NATALIA KOLESNYK, MOTHER: It was never in my head this could happen. But having this experience right now talking about the east part of Ukraine, I can think that this basically could be the situation. That's why I'm considering the fact that we are not sure and safe anyway.
HOLMES (on camera): Lviv is a vibrant historic city. It's close to Poland, Slovakia. It feels very European. It's also -- thanks to Russia, become a refuge for Ukrainians fleeing their homes. And not just from this crisis.
(voice over): They've come to from the Donbass in the east where Russian-backed separatists for eight years waged war on the Ukrainian government. And from Crimea, annexed by Russia in 2014.
Oksana Novikova (ph) and her family know well how the Kolesnyks feel. In 2014 when the Russians came to Crimea, she knew she had to leave and now runs this bakery in Lviv.
Oksana says, right now I feel calm because we Ukrainians have more confidence in ourselves. We are a united country. The notion that the massive and powerful Russian military might actually cross the border again, is almost surreal for Ukrainians that while they might be concerned the defiant too.
Many people went missing or were imprisoned when Russia occupied Crimea she says. I didn't want to wind up like them. So, I left.
For the Kolesnyk family they'll stay here in Lviv until this standoff, the threat of war recedes then they say they'll head home to Kiev.
(END VIDEOTAPE)
HOLMES: Now as the world watches the simmering tensions on the border between Russia and Ukraine, one tech company is looking past the possibility of conflict and focusing on what they want to build. CNN's Erin Burnett explains.
(BEGIN VIDEOTAPE)
[02:35:05]
ERIN BURNETT, CNN ANCHOR (voice over): As the power of Russia's military enters closer to Ukraine, many feared the first major strike will be digital.
BLINKEN: Cyberattacks will shut down key Ukrainian institutions.
BURNETT: In fact, we've already seen the largest cyberattack ever on Ukrainian banks and defense Web sites. But online may also be the field of a Ukrainian victory.
(on camera): I'm standing in the middle of an overgrown field. You can see the debris all around me. Look, there's trash pretty much everywhere you look. But people here have a dream of transforming this place. They want to basically turn it into a Tech City where 10,000 people will work. There will be hotels, kindergarten, sports fields, sort of a full-service mini city right here in the center of Lviv. And if they succeed, it'll transform this country.
Transformed from this to this. Because right now, Ukraine's path to NATO in the West, is blocked not just by Russia, but by its own oligarchs. The richest man here, Rinat Akhmetov controls a media group with some of Ukraine's top-rated television channels. Igor Kolomoisky 1+1 Media.
Where President Zelensky starred in the T.V. comedy series, they have the billions, but it's people like Vitaly Sadler, who founded his tech company Intellias 20 years ago here in Lviv, who say they can fend off the oligarchs because they trade in something way more valuable than steel and iron ore.
VITADLY SEDLER, CHIEF EXECUTIVE OFFICER, INTELLIAS: You cannot really hijack a company who cannot take it, right? Because the value of the company is in the people and in the knowledge. You cannot just --
BURNETT: No one can take that.
SEDLER: You don't take this like you take factory or something.
BURNETT: Intellias engineers like these developed software, including navigation systems for luxury German cars. Sedler says his company is on track to grow at least 60 percent this year. He insists he isn't changing growth plans yet because of the Russian crisis.
SEDLER: We're building a very strong middle class in the country and I believe that as time goes, the middle class have more and more political power over what's happening in the country. And this is very good development for the country. So, I am very excited about the business.
BURNETT: Excited about these men and women may be the future of Ukraine. Erin Burnett, CNN, Lviv, Ukraine.
(END VIDEOTAPE)
HOLMES: Now if Russia should attack Ukraine, Belarus could be key. It's heavily aligned with Russia and the two countries have been conducting joint military exercises of course, near the Belarus and border with Ukraine. CNN's Fred Pleitgen got a look at some of those exercises and a rare opportunity to talk to Putin ally, the Belarusian President Alexander Lukashenko.
(BEGIN VIDEOTAPE)
FREDERIK PLEITGEN, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice over): For the first time, we're getting a close-up view of some of the Russian forces the U.S. says are threatening Ukraine. Conducting massive live fire drills with Belarusian military inside Belarus. The U.S. says it fears this could be one of the places from which an attack on Ukraine could be launched.
Belarusian strong men and staunch Putin ally Alexander Lukashenko was combated when I confronted him with the allegations.
ALEXANDER LUKASHENKO, BELARUSIAN PRESIDENT (voice over): Do you still believe we're going to attack Ukraine from here? Or have you already overcome this mental block?
PLEITGEN: So, it's not about what I believe, it's about what the United States says. The United States says there's a very real threat of an attack from Russian territory or Belarusian territory towards Ukraine.
LUKASHENKO: We have an agreement between Belarus and Russia. We have practically formed here the United Russia-Belarus group, the United army that is you might say. And this is our official position. Please take it into account as we are taking into account your position.
PLEITGEN: The drills are called Allied Resolve 2022 and officially at the Russian and Belarusian military standoff enemy's attacking them. It involves tens of thousands of troops, including both countries air forces, and Russia's dangerous Iskander missile system that could easily hit Ukraine's capital Kiev of about 250 miles or 400 kilometers from here. The big question, where will all these Russian troops go when this exercise ends?
(on camera): Both Minsk and Moscow say all Russian forces are going to leave Belarus once these massive exercises are finished. But the U.S. and its allies are still skeptical and they say they'll believe withdrawal is happening once they see it.
(voice over): The Biden administration says there are now more than 150,000 Russian troops near Ukraine's borders and that an attack will probably happen within days. Lukashenko ripping into the U.S.'s assessment.
LUKASHENKO: You accuse Belarus and Russia not being able to invade Ukraine yesterday. We didn't, so your intelligence and billions of dollars that you're spending on it are useless. At least admit this.
[02:40:07]
PLEITGEN: Russia says it has no intention of attacking Ukraine, but today also warned if security demands it has made to the U.S. are not met there will be an answer using as Moscow puts it, military technical measures. Fred Pleitgen, CNN, Asipovichy, Belarus.
(END VIDEOTAPE)
HOLMES: And that'll do it for us here in Ukraine. At the moment I'll return at the top of the hour with more of course for now, Lynda, back to you in Atlanta, my friend.
LYNDA KINKADE, CNN ANCHOR: Thank you so much, Michael. Good to see that. Well, Canadian police appear to be targeting the leadership of the so-called Freedom Convoy which now has paralyzed the Canadian capital in protest of pandemic restrictions for nearly three weeks. According to lawyer, Tamara Lich, considered the public face of the protest was arrested in Ottawa along with another key organizer.
Both are facing multiple charges, including counseling to commit mischief and obstruction. The rest happened as dozens of offices swept through the protest area on Parliament Hill while the interim police chief had this warning for demonstrators.
(BEGIN VIDEO CLIP)
STEVE BELL, OTTAWA INTERIM POLICE CHIEF: In the past few days, we've been communicating directly with the unlawful protesters. We've told them they must leave and we've warned them the consequences of disobeying these rules. We want to end this unlawful protest peacefully and safely. We want to prepare -- we are prepared to employ lawful techniques to remove the unlawful protesters from our streets.
(END VIDEO CLIP)
KINKADE: Police also erected barriers and fences to seal off the protest site. Three separate protests along the U.S.-Canada border ended this week.
As protesters make their case against pandemic restrictions, Canadian health officials are adding one more tool to their arsenal against the virus. The nation has authorized the Novavax COVID vaccine for use in adults. Novax is also seeking authorization in the U.S. The vaccine is based on a more traditional medical technology compared to the newer mRNA vaccines made by Pfizer and Moderna. COVID infections in Hong Kong are soaring with thousands of new cases reported every day. Strict measures are already in place as part of their zero-COVID strategy. But as CNN's Ivan Watson reports, it's causing many to struggle with paying their bills.
IVAN WATSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Hong Kong's COVID bubble has finally burst. Just look at this line for COVID test. Testing capacity, clearly overwhelmed. For most of the last two years, the city managed to keep the virus out through some of the world's harshest quarantines and travel restrictions. But now authorities are counting thousands of preliminary positive infections a day.
And yet the Hong Kong government and the Chinese central government they're both doubling down on what they call a dynamic zero strategy. They want to completely eliminate the virus from this community.
Critics argue that genie is already out of the bottle. Most of the new infections are identified as the highly contagious Omicron variant. But more than two years into the pandemic, the Hong Kong government is once again locking down large sectors of society, like public playgrounds, kids cannot use those swings and they are also prohibited from in-person learning in all schools, family gatherings of more than two families at a time, banned.
Restaurants have to close after 6:00 p.m. Gyms, beauty salons, tattoo studios, all of those have been prohibited from working for weeks. The Hong Kong government says it's paying subsidies to help keep businesses afloat. But anecdotally, I'm talking to some small business owners who say it's not enough. And they're resorting to working underground illegally to help pay Hong Kong's famously high rents and keep food on the table.
One of the most dramatic transformations, Hong Kong has largely cut itself off from the outside world. Only residents are allowed in and they face long expensive quarantines. The result, in 2019, this airport handled more than 71 million passengers. In 2021, that number plunged to just 1.4 million passengers. The land boundary to mainland China also remains mostly closed. Surveys show business confidence is down and some people are voting with their feet.
According to government statistics, in 2020, in the first half of 2021, more than 160,000 residents emigrated and with no end to the restrictions in sight, that trend is unlikely to change.
(END VIDEOTAPE)
[02:45:02]
WATSON: Hong Kong once marketed itself as Asia's world city. Today, it's one of the most isolated places in the world. Ivan Watson, CNN, Hong Kong.
KINKADE: We can say COVID is causing a pandemic for -- of an inflation for economies right around the world. Next, our Richard Quest goes to Argentina whose long-term inflation often a lesson on dealing with growing prices. (COMMERCIAL BREAK)
KINKADE: Welcome back. Economists and investors are keeping a close eye on consumer prices and wages for clues on inflation. And those factors are rising which could be bad news for your bank account. As the pandemic enters its third year, families in the U.S. and other countries are feeling the pinch on price hikes on necessities like food, housing and energy. Thanks to sky-high inflation.
So how countries like the United States respond? Well, the latest minutes from the U.S. Federal Reserve show the policymakers a split. Inflation data release since their most recent meeting has led some investors to speculate that the Fed could raise rates by half a percentage point in back-to-back meetings. If they did it would be the first time that's happened since 1994. The fed's James Bullard spoke to CNN and says it needs to be ready if inflation persists any longer.
(BEGIN VIDEO CLIP)
JAMES BULLARD, PRESIDENT, FEDERAL RESERVE BANK OF ST. LOUIS: I've suggested that a good target would be to have the funds rate or the policy rate up at about 100 basis points by July 1st. And that does mean where we would have to move faster and more nimbly than we have in recent decades. But I think that's probably the appropriate policy. Now we need some risk management. In cases inflation does not moderate in the second half of this year.
(END VIDEO CLIP)
KINKADE: Well, now in the U.K., consumer prices rose at the fastest annual pace in nearly 30 years last month, increasing the chances the Bank of England will raise interest rates for a third meeting in a row.
The Vice President of the European Central Banks and inflation in the euro zone which hit 5.1 percent in January would not dip below its two percent goal this year.
And in Japan, consumer prices rose for the fifth straight month though a little slower than previous months.
So how do you keep up with rising prices? Well, Argentina has soaring inflation rates and they've had them for decades. And its people have learned a trick or two about how to deal with it. Richard Quest went to a marketing bonus areas with a local couple and got some tips on how to deal with ever growing prices.
(BEGIN VIDEOTAPE)
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: Look at this. Magnificent. Tell me about the sort of things you will find in going up in price here.
[02:50:00]
FLORENCIA PRATO, BUENOS AIRES RESIDENT: So, for example, a very traditional dish here in Argentina, Milanesa fueled by Peceto.
QUEST: Which is?
PRATO: Which is the kind of meat that we use to have Milanesas and it's 1400 Pesos. And last week, maybe it was 1200 Pesos.
QUEST: Really?
PRATO: So, it changes all the time. And you kind of have to start to go to another kind of meat in order to do those Milanesas.
QUEST: So here you have it 9000.
(CROSSTALK)
PRATO: Nine-hundred and sixty. Yes.
QUEST: That's 960 (INAUDIBLE)
PRATO: Yes.
QUEST: A thousand. And then you're working your way across.
PRATO: Yes, exactly. So, you have to find alternatives to have sort of the same dish, but with cheaper meat.
FRANCISCO FERNANDEZ FUNES, ARGENTINE JOURNALIST: This inflation rate about 50 percent makes you spend all the Peso you have. Because it's going to be worth less tomorrow than it is today. It's worth it's going to be worth even less the day after.
PRATO: So, saving money is not practical. You have to spend it all because next month is going to be worth less than you can buy as much as you bought last month with those Pesos that are staying in your bank account. So, you spend it all.
FUNES: For decades, Argentines have known that inflation will erode their savings, their salary. So, what do they do? They turn to the dollar. There is a sort of obsession with the dollar in Argentina.
QUEST: Let's go to fruit and veg. There's a line there. We'll have a kilo of the finest peaches.
FUNES: Peaches.
QUEST: Yes. We got a good one. Two (INAUDIBLE) two mangoes.
UNIDENTIFIED MALE: OK.
QUEST: Those mangoes. There we go. Thank you very much. What are you buying now that was (INAUDIBLE)
PRATO: (INAUDIBLE) definitely like peaches.
QUEST: Yes.
PRATO: Not buying as much. They're really expensive, like 300 Pesos a kilo, which is like four or five peaches. That definitely has changed.
QUEST: Muchas gracias.
FUNES: (INAUDIBLE)
QUEST: Right.
PRATO: So delicious.
FUNES: This is a good peach.
QUEST: We're just about getting a taste of inflation in the north. For the first time in decades, we're seeing price rise. What would you say to us? Because people in the North are saying, I go to the shops and Sunday is more expensive.
FUNES: They need to be smart about their purchasing decisions. They need to find a way to save money and to preserve the value of their hard work. They had to -- they had to get creative.
QUEST: You played with it all your life.
FUNES: Well, yes. Ever since I've been a teenager, I can think about inflation, and how things have gone up and they're going up and they continue to go up. And maybe they saw this thing. We just get used to it. We got used to it.
QUEST: It eats away your savings. It eats away at everything. It's like a -- it's like a rotting cancer.
FUNES: It's a chronic disease that we have here in Argentina.
(END VIDEOTAPE)
KINKADE: Thanks to Richard Quest there in Argentina. Well, still to come. A massive storm headed for the U.K. Storm Eunice is bringing dangerous winds and millions of people are being told to stay home. We'll have a live report from the weather center when we come back.
(COMMERCIAL BREAK)
KINKADE: Well, rescue operations are underway in Brazil after deadly landslides north of Rio de Janeiro.
[02:55:00]
KINKADE: At least 110 people have died and more than 100 others remain missing. Rainfall on Tuesday afternoon alone was more than the historical average for the entire month of February. And just days after some deadly hit parts of the U.K., the region is now bracing for another powerful storm. A rare danger to life alert was issued Thursday warning that Storm Eunice could bring significant and damaging winds.
Well, joining me now is meteorologist Derek Van Dam. And Derek, I understand the British army is on standby the weather office issuing is rare red warning, what's expected?
DEREK VAN DAM, CNN METEOROLOGIST: Yes. When the U.K. Met Office uses terminology like, you know, potential threat to life. You got to take this warning seriously. In fact, when you talk about red wind warnings issued by the U.K. Met Office, you have to go back to March 2018 to see the last one that the U.K. actually experienced. And now they have just included London within this red warning -- red wind warning.
So fallen trees, power outages, the whole gamut here. Road closures, travels disruptions, disruptions to communication and potential threat to property and life as well. So, this is a major storm that needs to be taken very seriously. I want to show you its origins. This is a water vapor satellite imagery. Here's Europe, there's the Atlantic Ocean and look what's developing. You can see some of that jet stream pushing in the moisture.
And then that kind of shading of brown moving towards the center of the U.K., that is actually the center of the storm approaching Ireland and Scotland as we speak. And it is an impressive storm that is going to bring incredible amounts of wind within the next three to 12 hours starting across Wales. In fact, look at some of these forecasts wind gusts in excess of 115 miles per hour or kilometers per hour in Plymouth.
And then by this afternoon 120 kilometers per hour or more in London. That's metropolitan London. One of the most populous areas of England and we have the potential for equivalent to a Category One Atlantic hurricane winds across this particular area. This is a significant storm that will --
(END VIDEOTAPE)
KINKADE: We might have just lost that connection. But as Derek was saying that storm threat facing the U.K. right now. Millions of people across the country are being told to stay home if they can. We will continue to bring you updates on the weather. I'm Lynda Kinkade. You can find me on Twitter and on Instagram. But stick around with us. Kim Brunhuber picks up that coverage from here along with our Michael Holmes who is in Ukraine after a quick break. Stay with us.
(COMMERCIAL BREAK)
